December 2012: Currency update
Investors' impatience with the lack of progress on a permanent solution to the Euroland debt crisis (if that's what it still is) has begun to take its toll. From its position at the beginning of October the euro has fallen by more than two US cents....
French mortgage currency update
Francois Hollande's election is representative of the French people’s will for change as they are tired of a centre-right led government which has always been rigid in its approach to security, immigration and work....
Mortgages in France - Why buy French property now?
Obtaining French mortgage finance for a property in France can sometimes be a daunting process as the French banks generally demand more documentation to support an application than their...
Effect of the UK budget on the French property and mortgage market
George Osborne’s budget today outlined some major changes to UK taxation but what effect if any will this have on the market for French property from UK buyers? The headline changes from the speech are...
Showing posts with label Fixed rates. Show all posts
Showing posts with label Fixed rates. Show all posts
Wednesday, 27 October 2010
Wednesday, 25 August 2010
FRENCH FIXED RATE MORTGAGES HIT HISTORIC LOWS: ATHENAMORTGAGES.COM OFFERS 20-YEAR FIX FROM 3.45%
Athenamortgages.com has seen a sharp rise in the number of enquiries in August from UK buyers looking to take advantage of the cheap fixed rate deals on offer at the moment from French lenders, and September promises to be even better as fixed rates are predicted to fall even further.
The reason for these record low fixed rates has been the downward pressure on the TEC10 index, due to a combination of a low inflation environment and investors seeking the safe haven of government bonds. The TEC10 index is the benchmark index against which French fixed rate mortgages are calculated.
The TEC10 index has been steadily falling since the start of the year and has consistently been below 3% during August, reaching an all-time low of 2.60% yesterday (Tuesday, 24th August). This compares to 3.65% on 6th January 2010.
John Busby, director, Athenamortgages.com, comments: “France is in a historically low interest rate environment at the moment with average fixed rate mortgages at levels not seen since the end of 2005. At that time though the TEC10 index was well above 3%. Now with the TEC10 at 2.60% and predicted to fall even further in the coming weeks, average fixed rates could well hit record low levels in September.
“With fixed rates falling, we have seen a noticeable shift in the types of mortgages people are ringing to discuss. Fixed rates are now the overwhelming choice amongst buyers - this is not just because of the rate drop, its also because the margin between the average fixed and variable mortgage has narrowed since May, making fixed rate deals even more attractive.
“For UK investors looking for a safe, long-term investment, second home buyers or people looking to relocate to France, there has never been a better time to purchase French property. Borrowing conditions are as good as they’ve ever been, and with property prices still well below their peak, UK buyers have a great opportunity to pick up a property at rock-bottom prices and fix monthly payments for 20 plus years at fantastic rates.”
The following table gives examples of the best fixed rate deals currently available through Athenamortgages.com to UK investors looking to purchase in France:-
* For the one and five-year fixed rate deals, the rate becomes variable after the fixed rate period ends, but cannot increase by more than 1% from the initial interest rate. The rates in the table are for indicative purposes only. Rates may vary depending on the loan amount, location of the property and the profile of the client.
About TEC10
The TEC10 is the benchmark index against which French fixed rates are calculated. The index is calculated daily on long term bond yield curves and published by the French treasury.
Athena Mortgages
Athena Mortgages is the leading multilingual French mortgage broker for international buyers seeking French property finance and loans. Focusing exclusively on mortgages in France, Athena Mortgages can provide expert knowledge of the current French mortgage best buys for second homes, investment property finance, remortgage and equity release loans.
www.athenamortgages.com
Telephone London +44 (0) 207 471 4515
The TEC10 is the benchmark index against which French fixed rates are calculated. The index is calculated daily on long term bond yield curves and published by the French treasury.
Athena Mortgages
Athena Mortgages is the leading multilingual French mortgage broker for international buyers seeking French property finance and loans. Focusing exclusively on mortgages in France, Athena Mortgages can provide expert knowledge of the current French mortgage best buys for second homes, investment property finance, remortgage and equity release loans.
www.athenamortgages.com
Telephone London +44 (0) 207 471 4515
Friday, 11 June 2010
Fixed rate mortgages in France vs UK.
Mortgage interest rates in France and across Europe are at an historic low currently which means that mortgage interest rates can only really go in one direction now. Whilst borrowers in the UK languish under the implied threat of interest rate rises owing to an UK inflation rate that is at the highest point since August 2008, the majority of their French counterparts can continue unconcerned thanks to their fixed rate mortgage in France which has a fixed rate for the term. Indeed, 70%-80% of current French mortgage holders have long term fixed rates of 15-25 years and with variable rates generally being capped and monthly payments on variable mortgages generally not allowed to increase by more than 10% per year, it is easy to see why the French are relaxed. By comparison, British borrowers live under the sword of Damocles as the majority, 70%-80% have fixed rates which are not longer than 5 years which means that there is always a chance of coming off a fixed rate into an environment of higher rates and thus substantially higher mortgage payments.
In France, the general trend is to have one mortgage to pay for a property rather than remortgaging every few years as borrowers do in the UK. The level of demand drives for fixed rate mortgages in France drives exceptionally good value deals not see in the UK. For example, at the time of writing, a French resident might fix for 25 years at a rate of 3.76%. “But that must be for a low level of loan to value!” I hear you cry. In fact this rate can be procured for 100% loan to value which makes the 5 year fix, currently available from the Co-op at 3.99% at only 75% loan to value, seem wildly overpriced. Even non residents can access a fixed rate mortgage in France with a better rate than that. Delving into the reasons for this price disparity, there are technical reasons relating to the UK banks purchases of covered bonds according to the Miles review commissioned by Gordon Brown but the main cause is the extreme price sensitivity of UK house buyers, looking at short term gain rather than long term value.
UK and Internationals buyers of French property can benefit from fixed rate mortgages in France with 4.3% fixed over 25 years at 90% loan to value being one of the most attractive deals. Unfortunately, French banks do not take charges on UK property, otherwise I am sure many borrowers in the UK would be looking to fix for the long term.
In France, the general trend is to have one mortgage to pay for a property rather than remortgaging every few years as borrowers do in the UK. The level of demand drives for fixed rate mortgages in France drives exceptionally good value deals not see in the UK. For example, at the time of writing, a French resident might fix for 25 years at a rate of 3.76%. “But that must be for a low level of loan to value!” I hear you cry. In fact this rate can be procured for 100% loan to value which makes the 5 year fix, currently available from the Co-op at 3.99% at only 75% loan to value, seem wildly overpriced. Even non residents can access a fixed rate mortgage in France with a better rate than that. Delving into the reasons for this price disparity, there are technical reasons relating to the UK banks purchases of covered bonds according to the Miles review commissioned by Gordon Brown but the main cause is the extreme price sensitivity of UK house buyers, looking at short term gain rather than long term value.
UK and Internationals buyers of French property can benefit from fixed rate mortgages in France with 4.3% fixed over 25 years at 90% loan to value being one of the most attractive deals. Unfortunately, French banks do not take charges on UK property, otherwise I am sure many borrowers in the UK would be looking to fix for the long term.
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